UPS has set a target to achieve 100% carbon neutrality by 2050, leveraging a mix of alternative fuels, fleet electrification, and operational efficiencies to meet its sustainability goals.

The plan includes milestones like using 40% alternative fuels in ground operations by 2025, sourcing 25% of its facilities’ power from renewables by 2025, and cutting CO2 per delivered package in half by 2035, said Gordon Reed, UPS director of industrial engineering.

“We’re trying to be better,” he said during the sixth Smart Freight symposium on sustainable transportation. “We really want to be a responsible partner and, quite frankly, so do all my competitors. They all have the same message. We’re all doing it in different ways… The key takeaway is that there’s technology out there. We need to use it. We want to use it as an organization. We’re trying to be socially and economically responsible.”

Electrification progress and impact

UPS currently operates around 20 electric package cars in Canada and plans to expand this number in early 2025. Additional vehicles have already been ordered. The company has also converted several yard shunters to electric models.

The transition in yard and on the road not only led to a “huge reduction” in carbon emissions but also helped improve employee satisfaction.

“Our drivers fight over who gets the electric ones,” Reed said. “The driver that would sit on those for eight or 10 hours a day with that thing vibrating [is] now having this smooth electric engine – [the impact] has been huge.”

However, electrification comes with its challenges, particularly due to the long lifespan of existing diesel vehicles. “A vehicle has a 10-year lifespan,” Reed said. “The biggest nightmare for me is if I have to order a new diesel vehicle today — it means 10 years before I can replace it.”

This is where alternative fuels come into play.

Diversified fuel strategies

UPS’s ‘rolling laboratory’ – a fleet of alternative fuel and advanced technology vehicles – includes approximately 18,000 vehicles globally, with options tailored to specific operational needs.

The company employs compressed natural gas (CNG) and hybrid vehicles for suburban operations with average ranges of 160 km, liquefied natural gas (LNG) and renewable natural gas (RNG) for regional routes spanning 650-965 km, and electric and ethanol-powered vehicles for city centers with ranges under 95 km.

RNG benefits

Reed said RNG is particularly significant because it allows for substantial CO2 reductions without modifying existing natural gas vehicles.

“RNG is a great example…our main challenge is getting enough supply, but over the next few years, there will be a lot more coming to the market,” he said. “In California, we have really seen how RNG can be used to transition our fleet to low-carbon, and we’ve been able to reduce our carbon emissions by 169% over the last five years.” This displaced 4.34 million metric tons of CO2, equivalent to removing nearly 1 million gasoline-powered cars from the road annually.

Beyond alternative fuels, UPS continues to optimize its operations to reduce emissions. Reed highlighted strategies like minimizing idling, designing routes that avoid left turns, and leveraging data to improve driver efficiency.

He also highlighted the importance of government funding and incentives on both provincial and federal levels, saying that UPS has leveraged $2.2 million in funding from the Government of Canada’s Medium and Heavy Duty Zero Emission Vehicles program to support its fleet electrification goals.